Set in 1923, "The Rats in the Walls" is narrated by the scion of the de la Poer family, who has moved from Massachusetts to his ancestral estate in England, the ruined Exham Priory. To the dismay of nearby residents, he restores the Priory, plainly revealing his ignorance of the horrific history of the place. After moving in, the protagonist and his cats frequently hear rats scurrying behind the walls. Upon investigating further (and as revealed in recurring dreams), he learns that his family maintained an underground city for centuries where they raised generations of "human cattle" (some regressed to a quadrupedal state) to supply their taste for human flesh. Maddened by the revelations of his family's past and driven by a hereditary cruelty, the narrator attacks one of his friends in the dark of the cavernous city and begins eating him. He is subsequently subdued and placed in a mental institution. At least one other investigator, Thornton, has gone insane as well. Soon after, Exham Priory is destroyed. The narrator maintains his innocence, proclaiming that it was "the rats, the rats in the walls," who ate the man. He continues to be plagued by the sound of rats in the walls of his cell.

Delapore: The narrator. His first name is not mentioned. He changes the spelling of his name back to the ancestral "de la Poer" after moving to England.

The title of Baron de la Poer actually exists in the Peerage of Ireland, and the spelling is indeed derived from le Poer, Anglo-Norman for "the Poor"; it is of some interest in peerage law.

Alfred Delapore: The narrator's son, born c. 1894. He goes to England as an aviation officer during World War I, where he hears stories about his ancestors for the first time. He is badly wounded in 1918, surviving for two more years as a "maimed invalid".

Edward Norrys: A captain in the Royal Flying Corps during World War I, Edward Norrys befriends Alfred Delapore and amuses him by telling him the "peasant superstitions" surrounding the de la Poer family that Norrys picked up in his native Anchester. He is described as "a plump, amiable young man".

Sir William Brinton: One of the "eminent authorities" that accompanies Delapore's expedition beneath Exham Priory, Sir William Brinton is an archaeologist "whose excavations in the Troad excited most of the world in their day." It is Brinton who figures out how to move the counter-weighted altar that leads to the caverns, and who noted that the hewn walls "must have been chiselled from beneath." He is the only member of the expedition who retains his composure when they discover the horrors below the priory.

Dr. Trask: Another eminent authority, Trask is an anthropologist who is "baffled" by the "degraded mixture" he finds in the skulls below Exham Priory -- "mostly lower than the Piltdown man in the scale of evolution, but in every case definitely human." (The Piltdown man, a supposedly prehistoric specimen discovered in 1912, was not revealed as a hoax until 1953, thirty years after the publication of "The Rats in the Walls"). Trask determines that "some of the skeleton things must have descended as quadrupeds through the last twenty or more generations."

Thornton: The expedition's "psychic investigator", Thornton faints twice when confronted with the nightmarish relics below Exham Priory, and ends up committed to the Hanwell insane asylum with Delapore, though they are prevented from speaking to one another.

Hanwell was an actual asylum, which Lovecraft probably read of in Lord Dunsany's "The Coronation of Mr. Thomas Shap" in The Book of Wonder (1912).

Gilbert de la Poer: The first Baron Exham, granted title to Exham Priory by Henry III in 1261. There is "no evil report" connected to the family name before this point, but within 50 years a chronicle is referring to a de la Poer as "cursed of God".

Lady Margaret Trevor: Lady Margaret Trevor of Cornwall married Godfrey de la Poer, second son of the fifth Baron Exham, probably in the 14th or 15th centuries. Such was her enthusiasm for the Exham cult that she "became a favourite bane of children all over the countryside, and the daemon heroine of a particularly horrible old ballad not yet extinct near the Welsh border."

Lady Mary de la Poer: After marrying the Earl of Shrewsfield (a title invented by Lovecraft), she was killed by her new husband and mother-in-law. When they explained their reasons to the priest they confessed to, he "absolved and blessed" them for their deed.

Walter de la Poer: The eleventh Baron Exham, he killed all the other members of his family with the help of four servants, about two weeks after making a "shocking discovery", and then fled to Virginia, probably in the 17th century. He is the ancestor of the American Delapores. He was remembered as "a shy, gentle youth", and later as "harassed and apprehensive"; Francis Harley of Bellview, "another gentleman-adventurer", regarded him as "a man of unexampled justice, honour, and delicacy."

Randolph Delapore: Randolph Delapore of Carfax, the Delapore's estate on the James River in Virginia, "went among the negroes and became a voodoo priest after he returned from the Mexican War." He is a cousin of the narrator, who regards him as "the one known scandal of my immediate forbears", and who sees this race-mixing life as "unpleasantly reminiscent" of the "monstrous habits" of the ancestral de la Poers.

Carfax Abbey is the name of Count Dracula's British outpost in the novel Dracula—a setting that has been suggested as an inspiration for Exham Priory.

Nigger Man: A cat owned by the narrator. He could detect the spectral rats. When the story was reprinted in Zest magazine (1950s), this name was changed to Black Tom.

"The Rats in the Walls" is loosely connected to Lovecraft's Cthulhu Mythos stories; toward the end, the narrator notes that the rats seem "determined to lead me on even unto those grinning caverns of earth's centre where Nyarlathotep, the mad faceless god, howls blindly to the piping of two amorphous idiot flute-players." In this reference to Nyarlathotep, the first after his introduction in the prose poem of the same name, the entity seems to have many of the attributes of the god Azathoth.

Before moving to Exham Priory, Delapore lives in Bolton, Massachusetts, a factory town where the title character of "Herbert West–Reanimator" performs some of his experiments. The town is also mentioned in "The Colour Out of Space"; it is not thought to be the same place as the real-world Bolton, Massachusetts.

Later Mythos writers have suggested the Magna Mater ("Great Mother") worshipped by the Exham cult was Shub-Niggurath.

The story was rejected by Argosy All-Story Weekly before being accepted by Weird Tales; Lovecraft claimed that the former magazine found it "too horrible for the tender sensibilities of a delicately nurtured publick [sic]". The publisher of Weird Tales, JC Henneberger, described the story in a note to Lovecraft as the best his magazine had ever received. It was one of the few Lovecraft stories anthologized during his lifetime, in the 1931 collection Switch on the Light, edited by Christine Campbell Thompson.

It is notable in that Lovecraft uses the technique of referring to a text (in this case real life works by Petronius and Catullus) without giving a full explanation of its contents, so as to give the illusion of depth and hidden layers to his work. He later refined this idea with the Necronomicon, prevalent in his Cthulhu Mythos stories.

Equally important to the later development of the Cthulhu Mythos was that it was a reprint of this story in Weird Tales that inspired Robert E. Howard to write to the magazine praising the work. This letter was passed on to Lovecraft and the two became friends and correspondents until Howard's death in 1936. This literary connection became reflected in each author adding aspects from the other's works to their own tales and Howard is considered one of the more prolific of the original Cthulhu Mythos authors.

Kingsley Amis listed "Rats" (along with "The Dunwich Horror") as one of the Lovecraft stories "that achieve a memorable nastiness".Lin Carter calls "Rats" "one of the finest stories of Lovecraft's entire career." S. T. Joshi describes the piece as "a nearly flawless example of the short story in its condensation, its narrative pacing, its thunderous climax, and its mingling of horror and poignancy."

The name of the cat, "Nigger Man", has often been cited in discussions of Lovecraft's racial attitudes. Lovecraft himself owned a beloved cat by that name until 1904.

Richard Corben and Donald Wandrei have adapted the story for the comic book format.

The Atlanta Radio Theater Company has produced a radio adaptation.

In 1973, Caedmon Audio published a cassette featuring David McCallum reading the story.

The film Necronomicon: Book of the Dead purports to dramatize three Lovecraft tales. The segment "The Drowned" involves a character named Edward DeLapoer, but the character is placed in a different setting and the plot does not resemble that of "The Rats in the Walls".

Exham Priory is mentioned in The New Traveller's Almanac and "The Adventure of Exham Priory".

"H. P. Lovecraft's Dreams in the Witch-House", the Masters of Horror adaptation of "The Dreams in the Witch House", references "The Rats in the Walls" in a line of dialog.

Tim Uren adapted the story into a one-man play of the same name which was performed at the 2006 Minnesota Fringe Festival.

Dave Walsh adapted and performed a one-man play of the same name at the 2007 Shakespeare by the Sea, Newfoundland Festival.